SWIFT refuses to cut Russia off, even if Washington insists

The SWIFT system, which ensures the transfer of financial messages between all banks of the world, will not disconnect Russia despite Western sanctions. In the political conflict between Russia and the West, SWIFT takes a neutral position, SWIFT CEO Gottfried Leibbrandt said.

The SWIFT system will thus stay neutral in the conflict between Russia and the West and will not disconnect the country from the system of financial payments because of the sanctions, CEO Gottfried Leibbrandt said at the SWIFT business forum in Moscow, RBC reports.

"The question of disconnecting Russia from the SWIFT financial reporting system is not worth it, and our position remains unchanged: we are a neutral party that provides for the interconnection of users and whose purpose is to service the global financial industry," Mr. Leibbrandt said.

SWIFT declared its neutrality back in 2014, when the question of disconnecting Russia from the system was raised for the first time following the coup in Ukraine and Russia's reunification with the Crimea. "Our mission is to be a global and neutral service provider," the company said in a statement back then. The European Parliament and the EU Council discussed such a possibility against the backdrop of sanctions in connection with the Ukrainian crisis, but the SWIFT management considered Russia's possible disconnection highly challenging to the reputation of the company and stressed that it would not make such decisions under the influence of political pressure.

Nevertheless, the West still believes that disconnecting Russia from the interbank messaging system is possible.

In August 2017, the Russian National Commercial Bank (RNCB) and Tempbank were disconnected from SWIFT, after the owner of the relevant software refused to cooperate with them because of US sanctions. RNCB, which works in the Crimea, said that the move would not affect its work as the bank operated only inside Russia.

In January, Deputy Prime Minister Arkady Dvorkovich acknowledged that disconnection from SWIFT could create great problems for the Russian banking system. If it happens, he said, Russian banks would have to switch to an outdated technology, but Western companies would face serious problems too.

In early April 2018, the United States adopted a new package of anti-Russian sanctions, which has become the most stringent one since 2014. Shortly thereafter, Washington announced its readiness to prepare new sanctions in the near future to punish Russia for supporting the Syrian authorities. It was said that Moscow was getting ready for a series of tough measures, including disconnection from SWIFT. The financial reporting system itself is based in Belgium and does not comply with US law. However, chances for Washington to succeed in cutting Russia off remain high.

To counter such a threat, Russia has been developing its own analog to SWIFT that would be used inside the country. The system is called the Financial Communications System of the Bank of Russia (known for the Russian initials as SPFS). On April 13, Rosteс (State Corporation for Assistance to Development, Production and Export of Advanced Technology) announced that it was switching to SPFS.

SWIFT stands for the Society for Worldwide Interbank Financial Telecommunications. The system was established in 1973. Today, SWIFT unites more than 10,000 banking and financial organisations in 210 countries and processes about 1.8 billion messages a year.